CLEAN HARBORS INC

(1)BASIS OF PRESENTATION

The accompanying consolidated interim financial statements are unaudited and include the accounts of Clean Harbors, Inc. and its subsidiaries (collectively, “Clean Harbors” or the “Company”) and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and, in the opinion of management, include all adjustments which are of a normal recurring nature and are necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. Management has made estimates and assumptions affecting the amounts reported in the Company’s consolidated interim financial statements and accompanying footnotes; actual results could differ from those estimates and judgments. The results for interim periods are not necessarily indicative of results for the entire year or any other interim periods. The financial statements presented herein should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

(2)SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are described in Note 2, “Significant Accounting Policies,” in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and remain the same other than as noted below:

Income Taxes

On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was signed into law in the United States. The Act includes significant provisions, such as the permanent extension of key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation for qualified assets and domestic research cost expensing, as well as certain international tax changes. Accounting Standards Codification 740, “Income Taxes,” requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. Many of the tax provisions of the Act are designed to accelerate tax deductions, which could lead to lower cash tax payments. The new tax provisions have multiple effective dates, with certain provisions effective in 2025 and others in future periods. The Company is still assessing the full impact of these tax law changes on its consolidated financial statements; however, the Company currently does not expect the Act to have a material impact on its financial position, results of operations or cash flows.

Recent Accounting Pronouncements

Accounting Pronouncements Adopted

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. The Company adopted ASU No. 2023-07 for the year ended December 31, 2024. The only significant impact from the adoption of this standard relates to incremental disclosures now required. See Note 16 for applicable reportable segment disclosures required by this guidance.

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances income tax disclosures related to the tax rate reconciliation and income taxes paid. This guidance will be effective for annual periods beginning the year ended December 31, 2025. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The requirements of this ASU are disclosure-related and are not expected to have an impact on the Company’s financial condition, results of operations or cash flows. The Company is currently evaluating the impact of adopting this new pronouncement on its income tax disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive

Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses. This guidance will be effective for annual periods beginning the year ended December 31, 2027. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating the impact of adopting this new pronouncement on its consolidated financial statement disclosures.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which is intended to modernize the accounting for internal-use software costs. The amendment eliminates the previous accounting model based on software development stages and aligns with current agile implementation principles. Under the new guidance, capitalization begins when management has authorized and committed to funding the project, and it is probable that the software will be completed and used for its intended purpose. The amendments are effective in annual periods beginning after December 15, 2027, and interim periods within those years, with early adoption permitted. The amendment may be applied on a prospective, retrospective or modified retrospective basis. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated statements.

(3)REVENUES

The Company generates revenues through the following operating segments: Environmental Services and Safety-Kleen Sustainability Solutions (“SKSS”). The Company’s Environmental Services operating segment generally hasfour sources of revenue, and the SKSS operating segment hastwo sources of revenue. The Company disaggregates third-party revenues by geographic location and source of revenue as management believes these categories depict how revenue and cash flows are affected by economic factors. The tables below present revenue billed to outside customers by a particular segment. Should it be necessary, there will be intercompany transactions to present the direct revenues in the appropriate segment results. The Company’s significant sources of revenue include:

Technical Services—Technical Services contribute to the revenues of the Environmental Services operating segment. Revenues for these services are generated from fees charged for waste material management and disposal services including onsite environmental management services, remediation projects, collection and transportation, packaging, recycling, treatment and disposal of waste. These services handle hazardous and/or non-hazardous waste, including per- and polyfluoroalkyl substances (“PFAS”). Revenue is primarily generated by short-term projects, most of which are governed by master service agreements that are long-term in nature and outline the pricing and legal frameworks for such arrangements. Services are provided based on purchase orders or agreements with the customer and include prices based upon units of volume of waste, material and personnel costs as well as transportation and other fees. Collection and transportation revenues are recognized over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The Company uses the input method to recognize revenue over time, based on time and materials incurred as a basis for measuring the satisfaction of the performance obligation. Revenues for treatment and disposal of waste are recognized upon completion of treatment, final disposition, or when the waste is shipped to a third-party for processing and disposal. The Company periodically enters into bundled arrangements for the collection and transportation and disposal of waste. For such arrangements, transportation and disposal are considered distinct performance obligations and the Company allocates revenue to each based on the relative standalone selling price (i.e., the estimated price that a customer would pay for the services on a standalone basis). Revenues and the related costs from waste that is not yet completely processed and disposed of are deferred. The deferred revenues and costs are recognized when the services are completed. The period between collection and transportation and the final processing and disposal ranges depending on the location of the customer, but generally is measured in days.

Industrial Services—Industrial Services contribute to the revenues of the Environmental Services operating segment. These revenues are primarily generated from industrial and specialty services provided to refineries, chemical plants, manufacturing facilities, power generation companies and other industrial customers throughout North America. Services include in-plant cleaning and maintenance services, plant outage and turnaround services, specialty cleaning services including chemical cleaning, pigging and high and ultra-high pressure water cleaning, leak detection and repair, daylighting, production services and upstream energy services. Services are provided based on purchase orders or agreements with the customer and include prices based upon daily, hourly or job rates for equipment, materials and personnel. The Company recognizes revenue for these services over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The Company uses the input method to recognize revenue over time, based on time and materials incurred.

Field and Emergency Response Services—Field and Emergency Response Services, which includes contributions from Hepaco Blocker, Inc. and its subsidiaries (collectively, “HEPACO”) since its acquisition on March 22, 2024, contribute to the revenues of the Environmental Services operating segment. Field Services revenues are generated from cleanup services at customer sites, including those managed by municipalities and utility providers, or other locations on a scheduled or emergency response basis. Services include confined space entry for tank cleaning, site decontamination, environmental remediation, railcar cleaning, manhole/vault clean outs, product recovery and transfer and vacuum services. Additional services include filtration, water treatment services and wetland restoration. Response services for environmental emergencies of any scale range from man-made disasters such as oil spills to natural disasters like hurricanes. Emergency response services also include spill cleanup on land and water, as well as contagion disinfection, decontamination and disposal services. Field and emergency response services are provided based on purchase orders or agreements with customers and include prices generally based upon daily, hourly or job rates for equipment, materials and personnel. The Company recognizes revenue for these services over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The Company uses the input method to recognize revenue over time, based on time and materials incurred. The duration of such services can be over a number of hours, several days or even months for larger scale projects.

Safety-Kleen Environmental Services—Safety-Kleen Environmental Services revenues contribute both to the Environmental Services operating segment and the SKSS operating segment. Revenues from providing containerized waste handling and disposal services, parts washer services and vacuum services, referred to collectively as the Safety-Kleen branches’ core service offerings, contribute to the revenues of the Environmental Services operating segment. In addition, sales of packaged blended oil products and other complementary product sales contribute to the revenues of the Environmental Services operating segment. Revenues generated from waste oil, anti-freeze and oil filter collection services, sales of bulk blended oil products and sales of bulk automotive fluids contribute to the SKSS operating segment. Due to the complementary nature of these products and services and their customer base, there are some cross-overs of Safety-Kleen Environmental Services revenue streams between the Environmental Services and SKSS operating segments.

Generally, the revenue from services is recognized over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. The duration of such services can be over a number of hours or several days. The Company uses the input method to recognize revenue over time, based on time and materials incurred. Product revenue is recognized upon the transfer of control whereby control transfers when the products are delivered to the customer. Containerized waste services consist of profiling, collecting, transporting and recycling or disposing of a wide variety of waste. Related collection and transportation revenues are recognized over time, as the customer receives and consumes the benefits of the services as they are being performed and the Company has a right to payment for performance completed to date. Parts washer services include customer use of the Company’s parts washer equipment, cleaning and maintenance of the parts washer equipment and removal and replacement of used cleaning fluids. Parts washer services are considered a single performance obligation due to the highly integrated and interdependent nature of the arrangement. Revenue from parts washer services is recognized over the service interval as the customer receives the benefit of the services.

Safety-Kleen Oil—Safety-Kleen Oil-related sales contribute to the revenues of the SKSS segment. These revenues are generated from bulk sales of high-quality base and blended lubricating oils to many industries, including major oil brands, lubricant blenders and manufacturers, blended lubricant distributors and government agencies. The business also sells recycled fuel oil to asphalt plants, industrial plants and pulp and paper companies. The used oil is also processed into vacuum gas oil which can be further re-refined into lubricant base oils or sold directly into the marine diesel oil fuel market. By-products coming off the refinery are a mixture of light end distillates and asphalt flux that are sold into various markets. Revenue for oil products is recognized at a point in time, upon the transfer of control. Generally, control transfers when the products are delivered to the customer.

The following tables present the Company’s third-party revenue disaggregated by source of revenue and geography (in thousands):

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and customer advances and deposits, or deferred revenue (contract liabilities), on the consolidated balance sheet. Generally, billing occurs subsequent to revenue recognition, as a right to payment is not just subject to passage of time, resulting in contract assets, which are generally classified as current. The Company sometimes receives advances or deposits from its customers before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. The contract liability balances at the beginning of each period presented are generally fully recognized in the subsequent three-month period.

(4)BUSINESS COMBINATIONS

2024 Acquisitions

On March 22, 2024, the Company acquired HEPACO for an all-cash purchase price of $392.2 million, net of cash acquired. The acquisition of HEPACO expanded the Environmental Services segment’s Field Services business.

The Company finalized the purchase accounting for this acquisition in the first quarter of 2025. The allocation of the purchase price was based on estimates of the fair value of assets acquired and liabilities assumed as of March 22, 2024. The following table summarizes the preliminary and final determinations and recognition of assets acquired and liabilities assumed (in thousands):

Other intangible assets acquired include customer relationships and trademarks/tradenames and are anticipated to have estimated useful lives ofbetween seven and 20 years with a weighted average useful life of approximately 19 years. The Company recorded the excess of the total purchase price, which includes the aggregate cash consideration paid in excess of the fair value of the tangible and intangible assets acquired and liabilities assumed, as goodwill. The goodwill recognized is attributable to the operating synergies, assembled workforce and growth potential that the Company expects to realize from the acquisition. Goodwill generated from the acquisition is not deductible for tax purposes.

The operations of HEPACO are included in the Company’s financial statements as of the date of acquisition. Pro forma revenue and earnings amounts on a combined basis as if this acquisition had been completed on January 1, 2024 are immaterial to the consolidated financial statements of the Company.

On March 1, 2024, the Company acquired Noble Oil Services, Inc. and its subsidiaries (collectively, “Noble”) for an all-cash purchase price of $68.7 million, net of cash acquired. The acquisition of Noble expanded the SKSS segment’s oil collection operations in the southeastern region of the United States while also adding incremental production from the re-refinery owned and operated by the acquired company.

The Company finalized the purchase accounting for this acquisition in the first quarter of 2025. The allocation of the purchase price was based on estimates of the fair value of assets acquired and liabilities assumed as of March 1, 2024. The following table summarizes the preliminary and final determinations and recognition of assets acquired and liabilities assumed (in thousands):

Other intangible assets acquired include customer relationships and trademarks/tradenames and are anticipated to have estimated useful lives ofbetween seven and 15 years with a weighted average useful life of approximately 13 years. The Company recorded the excess of the total purchase price, which includes the aggregate cash consideration paid in excess of the fair value of the tangible and intangible assets acquired and liabilities assumed, as goodwill. The goodwill recognized is attributable to the operating synergies and assembled workforce that the Company expects to realize from the acquisition. Goodwill generated from the acquisition is deductible for tax purposes.

The operations of Noble are included in the Company’s financial statements as of the date of acquisition. Pro forma revenue and earnings amounts on a combined basis as if this acquisition had been completed on January 1, 2024 are immaterial to the consolidated financial statements of the Company.

During 2024, the Company completed the acquisition ofthree additional privately-owned businesses for $17.1 million in total cash consideration. The operations of the acquired businesses were consolidated into the Environmental Services and SKSS segments. The acquisitions of the acquired businesses were not material in 2024 to the consolidated financial statements of the Company.

(5)INVENTORIES AND SUPPLIES

Inventories and supplies consisted of the following (in thousands):

Supplies inventories consist primarily of critical spare parts to support the Company’s incinerator and re-refinery operations and other general supplies used in the Company’s normal day-to-day operations. Other inventories consist primarily of parts washer components, cleaning fluids, absorbents and automotive fluids, such as windshield washer fluid and antifreeze.

(6)PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following (in thousands):

(1) Balances inclusive of gross right-of-use (“ROU”) assets classified as finance leases of $8.0 million in each period.

(2) Balances inclusive of gross ROU assets classified as finance leases of $287.3 million and $230.5 million, respectively.

(3) Balances inclusive of gross ROU assets classified as finance leases of $9.2 million in each period.

Depreciation expense, inclusive of landfill and finance lease amortization, was $101.3 million and $302.5 million for the three and nine months ended September 30, 2025, respectively. Depreciation expense, inclusive of landfill and finance lease amortization, was $86.2 million and $254.9 million for the three and nine months ended September 30, 2024, respectively. For the three and nine months ended September 30, 2025, capitalized interest recorded by the Company was negligible. For the three and nine months ended September 30, 2024, the Company recorded $3.3 million and $8.6 million, respectively, of capitalized interest mainly due to the construction of a new incinerator in Kimball, Nebraska.

(7)GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in goodwill by segment for the nine months ended September 30, 2025 were as follows (in thousands):

The Company assesses goodwill on an annual basis as of December 31 or at an interim date when events or changes in the business environment (“triggering events”) would more likely than not reduce the fair value of a reporting unit below its carrying value. During the period ended September 30, 2025, no such triggering events were identified.

As of September 30, 2025 and December 31, 2024, the Company’s intangible assets consisted of the following (in thousands):

Amortization expense of permits, customer and supplier relationships and other intangible assets was $13.4 million and $40.5 million in the three and nine months ended September 30, 2025, respectively. Amortization expense of permits, customer and supplier relationships and other intangible assets was $13.9 million and $40.7 million in the three and nine months ended September 30, 2024, respectively.

The expected amortization of the net carrying amount of finite-lived intangible assets at September 30, 2025 was as follows (in thousands):

(8)ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following (in thousands):

(9)CLOSURE AND POST-CLOSURE LIABILITIES

The changes to closure and post-closure liabilities (also referred to as “asset retirement obligations”) from January 1, 2025 through September 30, 2025 were as follows (in thousands):

In the nine months ended September 30, 2025, there were no significant benefits or charges resulting from changes in estimates for closure and post-closure liabilities.

(10)REMEDIAL LIABILITIES

The changes to remedial liabilities from January 1, 2025 through September 30, 2025 were as follows (in thousands):

In the nine months ended September 30, 2025, the Company decreased its remedial liability for a site by approximately $10 million due to its conclusion that loss was no longer probable based on the evaluation of available evidence.

(11)FINANCING ARRANGEMENTS

Long-term Debt

The following table is a summary of the Company’s long-term debt (in thousands):

Financing Activities

The Company’s significant financing arrangements are described in Note 12, “Financing Arrangements,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes to the arrangements described therein as of September 30, 2025.

As of September 30, 2025 and December 31, 2024, the estimated fair value of the Company's outstanding long-term debt, including the current portion, was $2.8 billion. The Company's estimates of fair value of its long-term debt, including the current portion, are based on quoted market prices or other available market data that are considered Level 2 measures according to the fair value hierarchy. Level 2 utilizes quoted market prices in markets that are not active, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency for similar assets and liabilities.

The Company maintains a $600.0 million revolving credit facility under which the Company hadno outstanding loan balance as of September 30, 2025 or December 31, 2024. As of September 30, 2025, the Company had $473.3 million available to borrow under the revolving credit facility, and outstanding letters of credit were $126.7 million.

Issuance of 5.750% Unsecured Senior Notes due 2033

On October 9, 2025, the Company issued $745.0 million aggregate principal amount unsecured senior notes due 2033 (the “2033 Notes”). The 2033 Notes will mature on October 15, 2033. Interest payments on the 2033 Notes will be paid semiannually in arrears, on April 15 and October 15 of each year, commencing on April 15, 2026, at a rate of 5.750% per annum.

The 2033 Notes were issued under an Indenture, dated October 9, 2025 (the “Indenture”). The Indenture contains various customary non-financial covenants and are guaranteed by substantially all of the Company’s current and future domestic subsidiaries. If a change of control triggering event (as defined in the Indenture) occurs, the Company may be required to offer the holders of the 2033 Notes an opportunity to sell all or part of their 2033 Notes at a purchase price of 101% of the principal amount of the 2033 Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. In addition, if the Company sells assets under certain circumstances, the Company may be required to make an offer to purchase a portion of the 2033 Notes.

At any time prior to October 15, 2028, the Company may on one or more occasions redeem the 2033 Notes, in whole or in part, at a price equal to 100% of the principal amount of the 2033 Notes redeemed, plus a “make-whole” premium, as set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. On or after October 15, 2028, the Company may on one or more occasions redeem the 2033 Notes, in whole or in part, at the applicable redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, at any time prior to October 15, 2028, the Company may on one or more occasions redeem up to 40% of the aggregate principal amount of the 2033 Notes with an amount equal to or less than the net cash proceeds received by the Company from certain equity offerings at a redemption price equal to 105.750% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The Indenture provides for customary events of default, which include (subject in certain cases to customary grace and cure periods) nonpayment of principal or interest; breach of other agreements in the Indenture; defaults in failure to pay certain other indebtedness; certain events of bankruptcy or insolvency; the failure to pay final judgments in excess of certain amounts of money against the Company and its significant subsidiaries; and the failure of certain guarantees to be enforceable (other than in accordance with the terms of the Indenture).

The Company used a portion of the net proceeds from the offering of the 2033 Notes and $1,260.0 million in borrowings under the Amended Credit Agreement (defined below) to refinance all of the approximately $1,457.3 million aggregate principal amount of secured senior term loans that were outstanding under the Company’s previously existing term loan credit facility, and accrued and unpaid interest thereon, and to pay related fees and expenses. The Company intends to use the remainder of the net proceeds from the offering of the 2033 Notes, together with cash on hand, to redeem all of the $545.0 million aggregate principal amount of its outstanding 4.875% senior notes due 2027 (the “2027 Notes”). On October 1, 2025, the Company issued a redemption notice with a 30-day notice period, as required by the indenture governing the 2027 Notes, indicating the Company’s intent to redeem the 2027 Notes in full on October 31, 2025.

Refinance of Secured Senior Term Loans

On October 9, 2025, the Company and substantially all of the Company’s domestic subsidiaries as guarantors entered into an amendment and restatement agreement with Goldman Sachs Lending Partners LLC, as administrative agent and collateral agent (the “Agent”), and the lenders party thereto, which amended and restated the credit agreement, dated as of June 30, 2017 (as previously amended, the “Prior Credit Agreement,” and as so amended and restated, the “Amended Credit Agreement”), among the Company, the Agent, the guarantors party thereto and the lenders party thereto.

The Amended Credit Agreement provides for a new tranche of refinancing term loans (the “New Term Loans”) in an aggregate principal amount equal to $1,260.0 million, the proceeds of which were used, along with certain proceeds of the 2033 Notes and cash on hand, to refinance in full all existing term loans outstanding under the Prior Credit Agreement immediately prior to closing of the Amended Credit Agreement. The New Term Loans mature on October 9, 2032 (which may change subject to certain conditions), and may be prepaid at any time without premium or penalty (other than customary breakage costs with respect to Term SOFR-based loans), except if the Company engages in certain repricing transactions before April 9, 2026, in which event a 1.0% prepayment premium would be due. The Company’s obligations under the Amended Credit Agreement with respect to the New Term Loans are guaranteed by substantially all of the Company’s domestic restricted subsidiaries and secured by liens on substantially all of the assets of the Company and the guarantors.

The New Term Loans bear interest at a rate of, at the Company’s option, either (i) “Term SOFR” (as defined in the Amended Credit Agreement, based primarily upon the secured overnight financing rate administered by the Federal Reserve Bank of New York (“SOFR”)), plus 1.50% per annum, or (ii) the U.S. Base Rate (as defined in the Amended Credit Agreement), plus 0.50% per annum. Prior to this amendment, the existing term loans bore interest at (i) Term SOFR plus 1.75% per annum or (ii) the U.S. Base Rate, plus 0.05% per annum. Interest on the term loans is paid monthly.

The Amended Credit Agreement contains representations and warranties, affirmative and negative covenants, and events of default, which the Company believes are usual and customary for an agreement of this type. Such covenants restrict the Company’s ability, among other matters, to incur debt, create liens on the Company’s assets, make restricted payments or investments or enter into transactions with affiliates.

Cash Flow Hedges

The Company’s strategy to hedge against fluctuations in variable interest rates involves entering into interest rate derivative agreements.

Although the interest rate on the Company’s secured senior term loans is variable, the Company has effectively fixed the interest rate on $600.0 million aggregate principal amount of the term loans outstanding by entering into interest rate swap agreements in 2022 with a notional amount of $600.0 million (the “2022 Swaps”). Under the terms of the 2022 Swaps, the Company receives interest based on the one-month SOFR index and pays interest at a weighted annual interest rate of 1.965%, resulting in an effective interest rate of 3.71% when considering the 1.75% interest rate margin of the term loans as of September 30, 2025. The refinance of the Secured Term Loan, discussed above, will reduce this effective interest rate to 3.46% prospectively. The 2022 Swaps will expire on September 30, 2027.

The Company recognizes the derivative instruments as either assets or liabilities on the balance sheet at fair value. As of September 30, 2025 and December 31, 2024, the Company has recorded a derivative asset with a fair value of $16.3 million and $32.4 million, respectively, within Other long-term assets on the consolidated balance sheets in connection with the 2022 Swaps.

No ineffectiveness has been identified on the 2022 Swaps and, therefore, the change in fair value is recorded in stockholders’ equity as a component of accumulated other comprehensive loss. Amounts are reclassified from accumulated other comprehensive loss into interest expense on the unaudited consolidated statement of operations in the same period or periods during which the hedged transactions affect earnings. The Company’s debt transactions entered into on October 9, 2025 will not impact the cash flow hedge classification of the 2022 Swaps.

(12)EARNINGS PER SHARE

The computation of basic earnings per share (EPS) is based on the weighted-average number of common shares outstanding. The computation of diluted EPS is based on the weighted-average number of common shares outstanding and potential dilutive common shares during the period as determined by using the treasury stock method.

The following are computations of basic and diluted earnings per share (in thousands, except per share amounts):

In the table above, potentially dilutive shares include the dilutive effect of unvested restricted stock awards and employee stock purchase plan (“ESPP”) rights (collectively referred to as “equity awards”). Potentially dilutive shares whose effect would have been antidilutive are excluded from the computation of diluted earnings per share. The Company included all outstanding performance awards, restricted stock awards and ESPP rights in the calculation of diluted earnings per share except as shown in the table below (in thousands):

(13)ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in accumulated other comprehensive loss by component and related tax impacts for the nine months ended September 30, 2025 were as follows (in thousands):

The amount realized in the unaudited cons olidated statement of operations during the three and nine months ended September 30, 2025 which was reclassified out of accumu lated other comprehensive loss was as follows (in thousands):

(14)STOCK-BASED COMPENSATION

Total stock-based compensation cost recognized for the three and nine months ended September 30, 2025 was $8.9 million and $22.6 million, respectively. Total stock-based compensation cost recognized for the three and nine months ended September 30, 2024 was $5.8 million and $20.7 million, respectively. The total income tax benefit recognized in the unaudited consolidated statements of operations from stock-based compensation expense for the three and nine months ended September 30, 2025 was $1.5 million and $3.8 million, respectively. The total income tax benefit recognized in the unaudited consolidated statements of operations from stock-based compensation expense for the three and nine months ended September 30, 2024 was $1.0 million and $3.7 million, respectively.

Restricted Stock Awards

The following table summarizes information about restricted stock awards for the nine months ended September 30, 2025:

As of September 30, 2025, there was $40.9 million of total unrecognized compensation cost arising from restricted stock awards. This cost is expected to be recognized over a weighted average period of 2.1 years. The total fair value of restricted stock vested during the three and nine months ended September 30, 2025 was $7.0 million and $29.1 million, respectively. The total fair value of restricted stock vested during the three and nine months ended September 30, 2024 was $16.3 million and $27.2 million, respectively.

Performance Stock Awards

Performance stock awards are subject to performance criteria established by the Compensation and Human Capital Committee of the Company’s board of directors prior to or at the date of grant. The performance stock awards are earned based on achieving certain revenue, Adjusted EBITDA, Adjusted EBITDA Margin and Return on Invested Capital targets set forth in the applicable award agreements. Performance stock awards include continued service conditions through vesting.

The following table summarizes information about performance stock awards for the nine months ended September 30, 2025:

(1) The granted activity for performance stock awards is recorded based on the target performance level of 100%. The actual number of performance share awards earned for the 2025 performance stock grants could range from 0% to 200% of target depending on the achievement of the pre-established performance goals.

As of September 30, 2025, there was $13.5 million of total unrecognized compensation cost arising from performance stock awards achieved or deemed probable of vesting. The total fair value of performance awards vested during the three and nine months ended September 30, 2025 was $2.2 million and $8.7 million, respectively. The total fair value of performance awards vested during the three and nine months ended September 30, 2024 was $2.6 million and $6.3 million, respectively.

Employee Stock Purchase Plan

The ESPP provides a means for eligible employees of the Company to authorize after-tax payroll deductions on a voluntary basis to be used for the periodic purchase of the Company's common stock at a 10% discount to its fair market value. The purchase price paid by the employees will be 90% of the lower of the closing price of the Company's common stock on (i) the first trading day of the offering period or (ii) the last trading day of the offering period. The contribution periods run from January to June and July to December with share issuances under the ESPP occurring on the closest business day on or prior to June 30 and December 31. There were 16,266 shares issued under the ESPP during the nine months ended September 30, 2025.

(15)COMMITMENTS AND CONTINGENCIES

The Company and its subsidiaries are subject to legal proceedings and claims arising in the ordinary course of business. Actions filed against the Company arise from commercial and employment-related claims including alleged class actions related to sales practices and wage and hour claims. The plaintiffs in these actions may be seeking damages or injunctive relief or both. These actions are in various jurisdictions and stages of proceedings, and some are covered in part by insurance. In addition, the Company’s waste management services operations are regulated by federal, state, provincial and local laws enacted to regulate discharge of materials into the environment and remediation of contaminated soil and groundwater or otherwise protect the environment. This ongoing regulation results in the Company frequently becoming a party to legal or administrative proceedings involving all levels of government authorities and other interested parties. The issues involved in such proceedings generally relate to alleged violations of existing permits and licenses or alleged responsibility under federal or state Superfund laws to remediate contamination at properties owned either by the Company or by other parties (“third-party sites”) to which either the Company or the prior owners of certain of the Company’s facilities shipped waste.

At September 30, 2025 and December 31, 2024, the Company had recorded reserves of $19.4 million and $29.8 million, respectively, for actual or probable liabilities related to the legal and administrative proceedings in which the Company was then involved, the principal of which are described below. As of September 30, 2025 and December 31, 2024, the $19.4 million and $29.8 million, respectively, of reserves consisted of (i) $11.5 million and $23.3 million, respectively, related to pending legal or administrative proceedings, including Superfund liabilities, which were included in remedial liabilities on the consolidated balance sheets, and (ii) $7.9 million and $6.5 million, respectively, primarily related to federal, state and provincial enforcement actions, which were included in accrued expenses on the consolidated balance sheets.

In management’s opinion, it is not reasonably possible that the potential liability beyond what has been recorded, if any, that may result from these actions, either individually or collectively, will have a material effect on the Company’s financial position, results of operations or cash flows. The Company periodically adjusts the aggregate amount of these reserves when actual or probable liabilities are paid or otherwise discharged, new claims arise, or additional relevant information about existing or probable claims becomes available.

Legal or Administrative Proceedings

As of September 30, 2025, the principal legal and administrative proceedings in which the Company was involved, or which had been terminated during 2025, relate to Safety-Kleen product liability cases and Superfund proceedings.

Safety-Kleen Product Liability Cases: Safety-Kleen, Inc. (“Safety-Kleen”), which is a legal entity acquired by the Company in 2012, has been named as a defendant in certain product liability cases that are currently pending in various courts and jurisdictions throughout the United States. As of September 30, 2025, there were approximately 85 proceedings (excluding cases which have been settled but not formally dismissed) wherein persons claim personal injury resulting from the use of Safety-Kleen’s parts cleaning equipment or cleaning products. These proceedings typically involve allegations that the solvent used in Safety-Kleen’s parts cleaning equipment contains contaminants and/or that Safety-Kleen’s recycling process does not effectively remove the contaminants that become entrained in the solvent during their use. In addition, certain claimants assert that Safety-Kleen failed to warn adequately the product user of potential risks, including a historic failure to warn that solvent contains trace amounts of toxic or hazardous substances such as benzene.

The Company maintains insurance that it believes will provide coverage for these product liability claims (over amounts accrued for self-insured retentions and deductibles in certain limited cases), except for punitive damages to the extent not insurable under state law or excluded from insurance coverage. The Company historically has vigorously defended, and intends to continue to vigorously defend, itself and the safety of its products against all of these claims. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Consequently, the Company is unable to ascertain the ultimate aggregate amount of monetary liability or financial impact with respect to these matters as of September 30, 2025. From January 1, 2025 to September 30, 2025, nine product liability claims were settled or dismissed. Due to the nature of these claims and the related insurance, the Company did not incur any expense as insurance provided coverage in full for all such claims. Safety-Kleen may be named in similar, additional lawsuits in the future, including claims for which insurance coverage may not be available.

Superfund Proceedings: The Company has been notified that either the Company or the prior owners of certain facilities the Company has since acquired have been identified as potentially responsible parties (“PRPs”) or potential PRPs of indemnification obligations in connection with 132 sites which are subject to or are proposed to become subject to proceedings under federal or state Superfund laws. Of the 132 Superfund related sites, six involve facilities that are now owned or leased by the Company and 126 involve third-party sites that received waste potentially shipped by the Company or the prior owners of certain facilities the Company has since acquired. Of the 126 third-party sites,30 are now settled,12 are currently requiring expenditures on remediation and 84 are not currently requiring expenditures on remediation.

In connection with each site, the Company has estimated the extent, if any, to which it may be subject, either directly or as a result of any indemnification obligations, for cleanup and remediation costs, related legal and consulting costs associated with PRP investigations, settlements and related legal and administrative proceedings. The amount of such actual and potential liability is inherently difficult to estimate because of, among other relevant factors, uncertainties as to the legal liability (if any) of the Company or the prior owners of certain of the Company’s facilities to contribute a portion of the cleanup costs, the assumptions that must be made in calculating the estimated cost and timing of remediation, the identification of other PRPs and their respective capability and obligation to contribute to remediation efforts and the existence and legal standing of indemnification agreements (if any) with prior owners, which may either benefit the Company or subject the Company to potential indemnification obligations. The Company believes its potential monetary liability could exceed $1.0 million atthree of the 132 Superfund related sites.

Of the 126 third-party sites at which the Company has been notified it is a PRP or potential PRP or may have indemnification obligations, the Company has indemnification agreements at a total of 17 sites. These agreements indemnify the Company with respect to any liability at the 17 sites for waste disposed prior to the Company’s acquisition of the former subsidiaries of Waste Management, Inc. and McKesson Corporation, which had shipped waste to those sites. Accordingly, the indemnifying parties are paying all costs of defending those subsidiaries in those 17 cases, including legal fees and settlement costs. However, there can be no guarantee that the Company’s ultimate liabilities for those sites will not exceed the amount recorded or that indemnities applicable to any of these sites will be available to pay all or a portion of related costs. Except for those indemnification agreements discussed, the Company does not have an indemnity agreement with respect to any of the 126 third-party sites discussed above.

Federal, State and Provincial Enforcement Actions

From time to time, the Company pays fines or penalties in regulatory proceedings relating primarily to waste treatment, storage or disposal facilities. As of September 30, 2025 and December 31, 2024, there weretwo proceedings for which the Company believed it was possible that the sanctions could equal or exceed $1.0 million. As of the date of these financial statements, the Company believes that the fines or other penalties in these or any of the other regulatory proceedings will, individually or in the aggregate, not have a material effect on its financial condition, results of operations or cash flows.

(16)SEGMENT REPORTING

Segment reporting is prepared on the same basis that the Company’s chief operating decision maker (the “CODM”), which is a committee comprised of the Company’s Co-Chief Executive Officers, manages the business, makes operating decisions and assesses performance. The Company is managed and reports astwo operating segments; (i) the Environmental Services segment and (ii) the Safety-Kleen Sustainability Solutions segment.

Third-party revenue is revenue billed to outside customers by a particular segment. Direct revenue is revenue allocated to the segment providing the product or service. Intersegment revenues represent the sharing of third-party revenues among the segments based on products and services provided by each segment as if the products and services were sold directly to the third-party. The intersegment revenues are shown net. The operations not managed through the Company’s operating segments described above are recorded as “Corporate.” Although such transactions are excluded from the business segment results, they are included in reported consolidated earnings.

The following tables reconcile third-party revenues to direct revenues by reportable segment (in thousands):

The primary financial measure by which the CODM evaluates the performance of its segments is Adjusted EBITDA, which consists of net income plus accretion of environmental liabilities, stock-based compensation, depreciation and amortization, net interest expense and provision for income taxes and excludes other transactions not deemed representative of fundamental segment results and other (income) expense, net. Transactions between the segments are accounted for at the Company’s best estimate based on similar transactions with outside customers.

The CODM uses Adjusted EBITDA to enhance their understanding of segment operating performance, which represents the Company’s performance in the ordinary, ongoing and customary course of operations. The reportable segment operating performance Adjusted EBITDA is used by the CODM to make key operating decisions such as the allocation of resources. Total assets by segment are not used by the CODM to assess the performance of, or allocate resources to, the Company’s segments. Therefore total assets by segment are not disclosed.

The tables below present total Reportable Segment Adjusted EBITDA and the relevant significant segment expenses provided to the CODM by reported segment (in thousands):

The following table presents Total Reportable Segment Adjusted EBITDA reconciled to income from operations before provision for income taxes (in thousands):

(1) Corporate Costs include certain revenue, cost of revenues and selling, general and administrative expenses not managed through the Company’s operating segments. These costs are not captured within the Company’s Reportable Segment Adjusted EBITDA, but are included in the Company’s total Adjusted EBITDA balances.